High-Tech Revolution Hits Home

CHANDLER, ARIZ.
— Two weeks ago, the cable guy hooked Miles Scull up to the future.

From one cable that pierces the back wall of his town house, he can watch 200 channels of digital-quality TV; check stocks through his 24-hour, high-speed Internet access; and talk over a digital phone line so clear that his mother in Arkansas sounds as if she's sitting on his couch.

"I feel like I'm a car in the fast lane while I used to be walking," says the elementary school teacher and father of two. "This is a quantum leap in speed, clarity, and definition."

Five miles of cactus-lined boulevard away, Steve Farquhar repeats virtually the same superlatives as he demonstrates a phone company's version of the same, three-in-one package. "There really is no comparison to what came before," he says.

What makes the two hookups important is that consumers here have a distinct choice in who will provide them with this new "voice-video-data" service. In a clash of telecommunications titans that pits a phone company against a cable firm, Phoenix residents will be the first big case study for how America will ultimately adapt to this new technology.

"This is the great convergence of markets and media that everyone has been predicting since the Telecommunications Act of 1995," says Boyd Peterson, a telecommunications industry analyst for the Yankee Group in Boston.

"The expectation was freewheeling competition, new technologies that would transform the American home and workplace, and the promise of lower telephone and cable rates," Mr. Peterson says. "It took a little longer, but suddenly, here it is."

The story, Peterson and others say, is important, partly because of the companies involved. One is a cable operator (Cox Communications) moving into telephone turf, the other a phone company (US West) moving into cable.

Competition between companies with different strengths may dramatically shift how - and which - Americans use their telephones, TVs, and the Internet.

Bringing the poor online

The lower prices and creative new offerings may also help bring the poor on-line - bridging the gap between the technological haves and have-nots. "Because of such features as e-mail and Web-surfing with just a small enabling device instead of an expensive computer, companies could draw a whole new segment of users from the ranks of the poor and elderly," says Mark Goldstein, analyst for the International Research Center in Phoenix.

Because of dramatically improved technology, the way Americans shop, entertain, and educate themselves could metamorphose virtually overnight.

"Phoenix has become the hotbed for what has been happening across these industries," says Mr. Goldstein. "This is the cutting edge, which other companies ... will be putting under the microscope to watch what does and doesn't fly."

For now, that means watching how consumers like Scull warm to the higher quality phone lines, TV, and Internet, and potentially lower prices. Shifts in usage patterns here will be scrutinized as companies consider how to lure potential customers in other markets into thinking of old technologies in new applications.

That might include e-mail and Web-surfing via TV, customized radio via the Internet, and video display combinations - such as downloading a baseball player's stats from the Internet while he is at bat on live TV.

Within two weeks of installation, Scull says the triple-access cable could completely change his lifestyle, from shopping and letter-writing, to TV, to education for his children.

Although he had Internet access before, the lightning-speed of his new feature, along with the fact that he no longer has log on, has Scull spending far more time in front of his computer.

Loving life in the fast lane

"I spend eight to 10 hours a week on-line now, compared to about an hour a week before," he says. In addition to downloading video games and research from online encyclopedias, Scull even comparison-shopped for his new car. "You get hooked up to the world ... in a whole new way," he says. "Before it was all so daunting, slow, and tedious. Now it's a way of life."

Scull is paying about the same fees he shelled out for cable and phone hookups before - about $30 per month.

Sociologists and industry analysts say they will be monitoring how such changes affect how many books a person buys, how much mail he sends, and how he socializes.

"Key innovations like these have the potential to explode and take off in ways no one can predict," says Peterson. "When consumers see their friends move to a whole new level of efficiency and productivity, they feel they must have it as well."

Besides surfing the Internet at lightning speed, the features on TV are impressive as well. They include the ability to scroll through TV and movie listings while programming is on the screen.

"Now I can channel surf to see what else is on while my wife continues to watch her program," says Randy Frantz, an official of Cox Communications.

US West boasts other features, such as a small box that appears on the TV screen when the phone rings, informing watchers who the caller is. And the potential exists for downloading Internet information onto a TV screen in real time.

"The residents of Phoenix are very fortunate to be in a place where two top companies are having to cater to their wishes," says Peterson. "Now all eyes are focused to see what the competition will bring."